Real estate giant Compass filed a lawsuit against popular home-buying website Zillow over one of its new rules. Compass is calling it the “Zillow ban” and claiming it violates antitrust laws.
Zillow’s new rule
Zillow announced the new rule in April, and it officially went into effect May 28.
Zillow says when a listing is publicly marketed, whether it’s on a brokerage website or a yard sign, it must be submitted to a Multiple Listing Service (MLS) within one day and published on Zillow and other sites that receive listing fees.
“A listing marketed to any buyer should be marketed to every buyer,” the company said when announcing the new rule. Zillow added that if a listing is added and not included on an MLS within that timeframe, it will not be posted on Zillow.
Compass lawsuit
Compass calls that the “Zillow ban” and claims it’s against the law. Compass aims to give clients a competitive advantage by posting homes before they appear on Zillow, claiming the home listing platform is leveraging its market dominance and attempting to create a monopoly by imposing a block on other listings.
“This lawsuit is about protecting consumer choice,” Compass CEO Robert Reffkin said in a statement to multiple outlets, including CBS News. “No one company should have the power to ban agents or listings simply because they don’t follow that company’s business model.”
Compass says they’re defending their three-pronged marketing strategy to better serve sellers, which includes “private exclusive” listings, “coming soon” listings and then moving listings to MLS platforms.
Clear Cooperation Policy
This dispute originates from the National Association of Realtors’ (NAR) Clear Cooperation Policy, also known as the CCP. That rule took effect in 2020 and requires realtors to submit a listing to their MLS within one business day of marketing the property.
Compass says that the rule was first proposed because of Compass’ adoption of an inventory-based strategy. They said many people in the industry even referred to it as the “Compass rule.”
Compass now says Zillow feels that the rule doesn’t go far enough. Zillow petitioned NAR in 2024 to strengthen CCP, saying, “NAR should expand CCP to prohibit office exclusives.”
Further allegations
In addition to the claims of Zillow attempting to create a monopoly, there are several other claims in the lawsuit.
Compass alleges that Zillow conspired with competing home-listing site Redfin to enact a similar policy, which is expected to take effect in September. The Federal Trade Commission (FTC) is now reportedly investigating a deal between Zillow and Redfin.
Compass also alleges Zillow proposed a quid pro quo during a recent meeting between Compass and Zillow executives. Compass says Zillow offered a “financial upside” if it abandoned its new three-pronged marketing strategy.
Next steps
In a statement to CBS MoneyWatch, a Zillow spokesperson said Compass’ claims “are unfounded” and that it will fight the lawsuit.
Redfin has not commented on this lawsuit or its mention in it.
Compass has demanded a jury trial.
